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    Russia’s Moves in Ukraine Unsettle Energy Companies and Prices

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    Oil and gas prices are up, and Western energy giants with operations and investments in Russia could find it harder to keep doing business there.Russia’s recognition of two breakaway regions in eastern Ukraine could threaten important investments of Western oil giants and further drive up global energy prices in the next few weeks.Since the closing days of the Cold War, Russia’s energy-based economy has become entwined with Europe’s. European energy companies like BP, TotalEnergies and Shell have major operations and investments in Russia. Though expansion of those holdings was largely halted after Russia’s 2014 annexation of Crimea, they remain important profit centers and could now be at risk.Seeking to isolate President Vladimir V. Putin of Russia, President Biden and the European Union imposed new sanctions on the Russian government and the country’s political and business elite on Tuesday. The measures do not directly target the energy industry. That’s why oil and gas prices settled only modestly higher on Tuesday afternoon in New York.But analysts said the energy industry could still be hurt if the crisis dragged on, particularly if Mr. Putin decided to send troops into the rest of Ukraine or sought to take control of the capital, Kyiv. Such aggressive action would most likely force Mr. Biden and other Western leaders to ratchet up their response.European leaders are already taking aim at some Russian energy exports. Chancellor Olaf Scholz said on Tuesday that Germany would halt certification of the Nord Stream 2 pipeline, which is supposed to deliver Russian gas. The decision will not have an immediate impact on European energy supplies because the pipeline is not yet operating. But Russian gas shipments through Ukraine could be halted, especially if Mr. Putin’s troops push farther into Ukraine or if he cuts off gas to Europe in retaliation for Western sanctions.Russia supplies one out of every 10 barrels of oil used around the world. After Western officials said Russian troops had entered eastern Ukrainian regions held by separatists, oil prices quickly jumped early Tuesday to nearly $100 a barrel, their highest level in more than seven years, before moderating.Energy experts say oil prices could easily rise another $20 a barrel if Mr. Putin seeks to occupy more or all of Ukraine. Such an outcome would also cause huge problems for Western oil companies that do business in Russia.“In that environment, the legal and reputational risk faced by Western energy companies operating in Russia will rise sharply,” said Robert McNally, who was an energy adviser to President George W. Bush and is now president of the Rapidan Energy Group, a consulting firm. “For oil markets, this means slower supply growth and even tighter global balances and higher prices in the coming years.”TotalEnergies, which is based near Paris, owns nearly 20 percent of Novatek, Russia’s largest liquefied natural gas company, and Shell has a strategic alliance with Gazprom, Russia’s natural gas monopoly.The Salym oil field, which Shell operates jointly with Gazprom in western Siberia.Alexander Zemlianichenko Jr./BloombergThe Western oil company most involved in Russia is BP, which owns nearly 20 percent of Rosneft, the state-controlled energy company managed by Igor Sechin, who is widely considered a close Putin ally and adviser. BP’s chief executive, Bernard Looney, and its former chief executive Bob Dudley sit on Rosneft’s board with Mr. Sechin and Alexander Novak, Russia’s deputy prime minister.Rosneft contributed $2.4 billion in profits and $600 million in dividends to BP in 2021, and has a secondary listing on the London Stock Exchange. About a third of BP’s oil production, or 1.1 million barrels a day, came from Russia last year.BP executives have so far expressed calm. “We have been there over 30 years and our job is to focus on our business, and that is what we are doing,” Mr. Looney said in a recent conference call with analysts. “If something comes down the road, then obviously we will deal with it as it comes.”Most oil companies have been reporting bumper profits because of rising oil and gas prices. European firms are using some of their profits to invest more in wind, solar, hydrogen and other forms of cleaner energy. But the current crisis could be a major distraction, if not worse.Doing business in Russia has always been complicated, especially as Mr. Putin reasserted state control over energy, squeezing private investors.Shell was forced to give up control of its premier Russian liquefied natural gas project on Sakhalin Island, in eastern Russia, to Gazprom in 2006. Shell retains a modest stake in the facility, and it appears to want to keep the door open to more business in Russia. Along with four other European companies, it helped finance the estimated $11 billion Nord Stream 2 pipeline to Germany.TotalEnergies has continued investing in a $27 billion natural gas complex in the Yamal Peninsula, in the Arctic, that Novatek controls. The project sidestepped earlier Western sanctions by obtaining financing from Chinese banks. It began producing gas for European and Asian customers in 2017.Share prices of BP and Total closed on Tuesday down more than 2 percent, and Shell was down about 1 percent.Prospects for Western oil companies seeking to do business in Russia were once far brighter. Exxon Mobil, Italy’s ENI and other foreign oil companies teamed up with Rosneft in 2012 and 2013 to explore Arctic oil and gas fields.BP owns nearly 20 percent of Rosneft, which operates this refinery in Novokuibyshevsk, Russia.Andrey Rudakov/BloombergBut U.S. and European Union sanctions imposed after Russia’s seizure of Crimea forced many Western companies to stop expanding in Russia in part by limiting access to financing and technology for deepwater exploration.Exxon formally abandoned exploration ventures with Rosneft in 2018, and took a $200 million after-tax loss.Understand How the Ukraine Crisis DevelopedCard 1 of 7How it all began. More

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    Why Are Oil Prices So High and Will They Stay That Way?

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    HOUSTON — Oil prices are increasing, again, casting a shadow over the economy, driving up inflation and eroding consumer confidence.Crude prices rose more than 15 percent in January alone, with the global benchmark price crossing $90 a barrel for the first time in more than seven years, as fears of a Russian invasion of Ukraine grew.Though the summer driving season is still months away, the average price for regular gasoline is fast approaching $3.40 a gallon, roughly a dollar higher than it was a year ago, according to AAA.The Biden administration said in November that it would release 50 million barrels of oil from the nation’s strategic reserves to relieve the pressure on consumers, but the move hasn’t made much of a difference.Many energy analysts predict that oil could soon touch $100 a barrel, even as electric cars become more popular and the coronavirus pandemic persists. Exxon Mobil and other oil companies that only a year ago were considered endangered dinosaurs by some Wall Street analysts are thriving, raking in their biggest profits in years.Why are oil prices suddenly so high?The pandemic depressed energy prices in 2020, even sending the U.S. benchmark oil price below zero for the first time ever. But prices have snapped back faster and more than many analysts had expected in large part because supply has not kept up with demand.Oil prices are at their highest point since 2014.Price of a barrel of Brent crude, the global benchmark, and West Texas Intermediate, the U.S. standard

    Source: FactSetBy The New York TimesWestern oil companies, partly under pressure from investors and environmental activists, are drilling fewer wells than they did before the pandemic to restrain the increase in supply. Industry executives say they are trying not to make the same mistake they made in the past when they pumped too much oil when prices were high, leading to a collapse in prices.Elsewhere, in countries like Ecuador, Kazakhstan and Libya, natural disasters and political turbulence have curbed output in recent months.Understand Russia’s Relationship With the WestThe tension between the regions is growing and Russian President Vladimir Putin is increasingly willing to take geopolitical risks and assert his demands.Competing for Influence: For months, the threat of confrontation has been growing in a stretch of Europe from the Baltic Sea to the Black Sea. Threat of Invasion: As the Russian military builds its presence near Ukraine, Western nations are seeking to avert a worsening of the situation.Energy Politics: Europe is a huge customer of Russia’s fossil fuels. The rising tensions in Ukraine are driving fears of a midwinter cutoff.Migrant Crisis: As people gathered on the eastern border of the European Union, Russia’s uneasy alliance with Belarus triggered additional friction.Militarizing Society: With a “youth army” and initiatives promoting patriotism, the Russian government is pushing the idea that a fight might be coming.“Unplanned outages have flipped what was thought to be a pivot towards surplus into a deep production gap,” said Louise Dickson, an oil markets analyst at Rystad Energy, a research and consulting firm.On the demand side, much of the world is learning to cope with the pandemic and people are eager to shop and make other trips. Wary of coming in contact with an infectious virus, many are choosing to drive rather than taking public transportation.But the most immediate and critical factor is geopolitical.A potential Russian invasion of Ukraine has “the oil market on edge,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington. “In a tight market, any significant disruptions could send prices well above $100 per barrel,” Mr. Cahill wrote in a report this week.Russia produces 10 million barrels of oil a day, or roughly one of every 10 barrels used around the world on any given day. Americans would not be directly hurt in a significant way if Russian exports stopped, because the country sends only about 700,000 barrels a day to the United States. That relatively modest amount could easily be replaced with oil from Canada and other countries.A Russian invasion of Ukraine could interrupt oil and gas shipments, which would increase prices further.Brendan Hoffman for The New York TimesBut any interruption of Russian shipments that transit through Ukraine, or the sabotage of other pipelines in northern Europe, would cripple much of the continent and distort the global energy supply chain. That’s because, traders say, the rest of the world does not have the spare capacity to replace Russian oil.Even if Russian oil shipments are not interrupted, the United States and its allies could impose sanctions or export controls on Russian companies, limiting their access to equipment, which could gradually reduce production in that country.In addition, interruptions of Russian natural gas exports to Europe could force some utilities to produce more electricity by burning oil rather than gas. That would raise demand and prices worldwide.What can the United States and its allies do if Russian production is disrupted?The United States, Japan, European countries and even China could release more crude from their strategic reserves. Such moves could help, especially if a crisis is short-lived. But the reserves would not be nearly enough if Russian oil supplies were interrupted for months or years.Western oil companies that have pledged not to produce too much oil would most likely change their approach if Russia was unable or unwilling to supply as much oil as it did. They would have big financial incentives — from a surging oil price — to drill more wells. That said, it would take those businesses months to ramp up production.What is OPEC doing?President Biden has been urging the Organization of the Petroleum Exporting Countries to pump more oil, but several members have been falling short of their monthly production quotas, and some may not have the capacity to quickly increase output. OPEC members and their allies, Russia among them, are meeting on Wednesday, and will probably agree to continue gradually increasing production.In addition, if Russian supplies are suddenly reduced, Washington will most likely put pressure on Saudi Arabia to raise production independently of the cartel. Analysts think that the kingdom has several million barrels of spare capacity that it could tap in a crisis.What impact would higher oil prices have on the U.S. economy?A big jump in oil prices would push gasoline prices even higher, and that would hurt consumers. Working-class and rural Americans would be hurt the most because they tend to drive more. They also drive older, less fuel-efficient vehicles. And energy costs tend to represent a larger percentage of their incomes, so price increases hit them harder than more affluent people or city dwellers who have access to trains and buses.Rising oil and gas prices would pinch consumers, especially the less affluent and rural residents.Jim Lo Scalzo/EPA, via ShutterstockBut the direct economic impact on the nation would be more modest than in previous decades because the United States produces more and imports less oil since drilling in shale fields exploded around 2010 because of hydraulic fracturing. The United States is now a net exporter of fossil fuels, and the economies of several states, particularly Texas and Louisiana, could benefit from higher prices.What would it take for oil prices to fall?Oil prices go up and down in cycles, and there are several reasons prices could fall in the next few months. The pandemic is far from over, and China has shut down several cities to stop the spread of the virus, slowing its economy and demand for energy. Russia and the West could reach an agreement — formal or tacit — that forestalls a full-scale invasion of Ukraine.And the United States and its allies could restore a 2015 nuclear agreement with Iran that former President Donald J. Trump abandoned. Such a deal would allow Iran to sell oil much more easily than now. Analysts think the country could export a million or more barrels daily if the nuclear deal is revived.Ultimately, high prices could depress demand for oil enough that prices begin to come down. One of the main financial incentives for buying electric cars, for example, is that electricity tends to be cheaper per mile than gasoline. Sales of electric cars are growing fast in Europe and China and increasingly also in the United States. More

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    Job Openings Remained Elevated in December Despite Omicron Surge

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    The Omicron variant of the coronavirus has disrupted business and kept millions of people home from work. But in December, at least, it did little to cool off the red-hot job market.Employers posted 10.9 million open jobs in the last month of 2021, the Labor Department said Tuesday. That was up modestly from November, and close to the record 11.1 million openings in July. There were roughly 1.7 job openings for every unemployed worker in December, the most in the two decades the government has been keeping track.Lots of jobs, not enough workersThere were nearly 11 million jobs posted in December and fewer than 7 million unemployed workers, the highest ratio in the two decades the government has been keeping track.

    Notes: Unemployment figures adjusted to account for workers misclassified as employed. Data is seasonally adjusted.Source: Labor DepartmentBy The New York TimesForecasters had expected the jump in coronavirus cases to lead to a pullback in recruiting, and a slowdown is still possible. Nationally, coronavirus cases did not reach their peak until mid-January, and they are still rising in some parts of the country. Job postings on the career site Indeed, which tend to track the government’s data relatively closely, remained high through much of December but fell in January.The virus kept millions of workers home in December and January, leaving many businesses short staffed and forcing some to close or limit their hours. That probably forced some companies to postpone hiring. Employers might have also found it harder to hire because some people were unwilling to look for or start new jobs as virus cases rose, or unable to do so because of child care obligations.But there is little evidence so far that Omicron has derailed a strong job market. Employers laid off or fired just 1.2 million workers in December, the fewest on record. The difficult hiring environment may have led some companies that normally shed temporary workers after the holidays to hold on to them this year, said Diane Swonk, chief economist for the accounting firm Grant Thornton.“Companies kept their seasonal hires,” she said. “One, because it’s already a labor shortage. And two, because they had so many people out sick that they wanted to keep people on.”Many workers are taking advantage of their leverage by seeking out better jobs. More than 4.3 million workers quit their jobs voluntarily, down a bit from November but still near a record.With workers scarce and employees in the driver’s seat, companies are raising pay. Wages and salaries rose 4.5 percent in the final three months of 2021, according to separate data released by the Labor Department last week. Wages are rising fastest in sectors where labor is particularly scarce, such as leisure and hospitality.Economists will get a more up-to-date snapshot of the labor market on Friday, when the Labor Department releases data on job growth and unemployment in January. Forecasters surveyed by FactSet expect the report to show that employers added 165,000 jobs. But Omicron has created an unusual amount of uncertainty, and some economists believe the report could show a net loss of jobs last month. More

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    Rapid Inflation Fuels Debate Over What’s to Blame: Pandemic or Policy

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    The White House is emphasizing that inflation is worldwide. Economists say that’s true — but stimulus-spurred consumer buying is also to blame.The price increases bedeviling consumers, businesses and policymakers worldwide have prompted a heated debate in Washington about how much of today’s rapid inflation is a result of policy choices in the United States and how much stems from global factors tied to the pandemic, like snarled supply chains.At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation, including factory shutdowns in Asia and overtaxed shipping routes that are causing shortages and pushing up prices everywhere. The officials increasingly cite high inflation in places including the euro area, where prices are climbing at the fastest pace on record, as a sign that the world is experiencing a shared moment of price pain, deflecting the blame away from U.S. policy.But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.The world’s trade machine is producing, shipping and delivering more goods to American consumers than it ever has, as people flush with cash buy couches, cars and home office equipment, but supply chains just haven’t been able to keep up with that supercharged demand.Kristin J. Forbes, an economist at the Massachusetts Institute for Technology, said that “more than half of the increase, at least, is due to global factors.” But “there is also a domestic demand component that is important,” she said.The White House has tried to address inflation by boosting supply — announcing measures to unclog ports and trying to ramp up domestic manufacturing, all of which take time. But rising inflation has already imperiled Mr. Biden’s ability to pass a sprawling social policy and climate bill over fears that more spending could add to inflation. Senator Joe Manchin III, the West Virginia Democrat whose vote is critical to getting the legislation passed, has cited rising prices as one reason he won’t support the bill.The demand side of today’s price increases may prove easier for policymakers to address. The Federal Reserve is preparing to raise interest rates to make borrowing more expensive, slowing spending down, in a recipe that could help to tame inflation. Fading government help for households may also naturally bring down demand and soften price pressures.Inflation has accelerated sharply in the United States, with the Consumer Price Index climbing by 7 percent in the year through December, its fastest pace since 1982. But in recent months, it has also moved up sharply across many countries, a fact administration officials have emphasized.“The inflation has everything to do with the supply chain,” President Biden said during a news conference on Wednesday. “While there are differences country by country, this is a global phenomenon and driven by these global issues,” Jen Psaki, the White House press secretary, said after the latest inflation data were released.It is the case that supply disruptions are leading to higher inflation in many places, including in large developing economies like India and Brazil and in developed ones like the euro area. Data released in the United Kingdom and in Canada on Wednesday showed prices accelerating at their fastest rate in 30 years in both countries. Inflation in the eurozone, which is measured differently from how the U.S. calculates it, climbed to an annual rate of 5 percent in December, according to an initial estimate by the European Union statistics office.“The U.S. is hardly an island amidst this storm of supply disruptions and rising demand, especially for goods and commodities,” said Eswar Prasad, a professor of trade policy at Cornell University and a senior fellow at the Brookings Institution.But some economists point out that even as inflation proves pervasive around the globe, it has been more pronounced in America than elsewhere.“The United States has had much more inflation than almost any other advanced economy in the world,” said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster.The difference, he said, comes because “the United States’ stimulus is in a category of its own.”White House officials have argued that differences in “core” inflation — which excludes food and fuel — have been small between the United States and other major economies over the past six months. And the gaps all but disappear if you strip out car prices, which are up sharply and have a bigger impact in the United States, where consumers buy more automobiles. (Mr. Furman argued that people who didn’t buy cars would have spent their money on something else and that simply eliminating them from the U.S. consumption basket is not fair.)Administration officials have also noted that the United States has seen a robust rebound in economic growth. The International Monetary Fund said in October that it expected U.S. output to climb by 6 percent in 2021 and 5.2 percent in 2022, compared with 5 percent growth last year in the euro area and 4.3 percent growth projected for this year.“To the extent that we got more heat, we got a lot more growth for it,” said Jared Bernstein, a member of the White House Council of Economic Advisers.While many nations spent heavily to protect their economies from coronavirus fallout — in some places enough to push up demand, and potentially inflation — the United States approved about $5 trillion in spending in 2020 and 2021. That outstripped the response in other major economies as a share of the nation’s output, according to data compiled by the International Monetary Fund.Many economists supported protecting workers and businesses early in the pandemic, but some took issue with the size of the $1.9 trillion package last March under the Biden administration. They argued that sending households another round of stimulus, including $1,400 checks, further fueled demand when the economy was already healing.Consumer spending seemed to react: Retail sales, for instance, jumped after the checks went out.Americans found themselves with a lot of money in the bank, and as they spent that money on goods, demand collided with a global supply chain that was too fragile to catch up.Jutharat Pinyodoonyachet for The New York TimesAdam Posen, president of the Peterson Institute for International Economics, said the U.S. government spent too much in too short a time in the first half of 2021.“If there had not been the bottlenecks and labor market shortages, it might not have mattered as much. But it did,” he said.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Mexico Is Buying a Texas Oil Refinery in a Quest for Energy Independence

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    President López Obrador wants to halt most oil exports and imports of gasoline and other fuels. Critics say he is reneging on Mexico’s climate change commitments.DEER PARK, Texas — Two giant murals, on storage tanks at an oil refinery here, depict the rebels led by Sam Houston who secured Texas’ independence from Mexico in the 1830s. This week those murals will become the property of the Mexican national oil company, which is acquiring full control of the refinery.The refinery purchase is part of President Andres Manuel López Obrador’s own bid for an independence of sorts. In an effort to achieve energy self-sufficiency, the president of Mexico is investing heavily in the state-owned oil company, placing a renewed emphasis on petroleum production and retreating from renewable energy even as some oil giants like BP and Royal Dutch Shell are investing more in that sector.Mr. López Obrador aims to eliminate most Mexican oil exports over the next two years so the country can process more of it domestically. He wants to replace the gasoline and diesel supplies the country currently buys from other refineries in the United States with fuel produced domestically or by the refinery in Deer Park, which would be made from crude oil it imports from Mexico. The shift would be an ambitious leap for Petroleos Mexicanos, the company commonly known as Pemex. The company’s oil production, comparable to Chevron’s in recent years, has been falling for more than a decade, and it shoulders more than $100 billion in debt, the largest of any oil company in the world.The decision to pay $596 million for a controlling interest in the Deer Park refinery, which sits on the Houston ship channel and would be the only major Pemex operation outside Mexico, is central to fulfilling Mr. López Obrador’s plans to rehabilitate the long-ailing oil sector and establishing eight productive refineries for Mexican use. Mexico also agreed to pay off $1.2 billion in debts that Pemex and Shell jointly owe as co-owners of the refinery, which is profitable.“It’s something historic,” Mr. López Obrador said last month. In a separate news conference last year, he said, “The most important thing is that in 2023 we will be self-sufficient in gasoline and diesel and there will be no increase in fuel prices.”While Mr. Lopez Obrador’s policies diverge from the rising global concern over climate change, they reflect a lasting temptation for leaders and lawmakers worldwide: replacing imported energy sources with domestically produced fuels. Further, the generally well-paying jobs the oil and other fossil fuel industries provide are politically popular across Latin America, Africa as well as industrialized countries like the United States.In the 1930s, the Mexican government took over Royal Dutch Shell’s operations south of the border as it nationalized the entire oil industry then dominated by foreigners. Now Mr. López Obrador is poised to go one step further, taking complete control of a big Shell oil refinery.The takeover is all the more pointed because it is happening in an industrial suburb that calls itself “the birthplace of Texas,” where rebels marched to the San Jacinto battlefield to defeat the Mexican Army — the event commemorated on the refinery murals. The battlefield is a five-mile drive from the refinery.It is hard to overestimate the connection between oil and politics in Mexico, where the day petroleum was nationalized, March 18, is a national holiday. Oil provides the Mexican government with a third of its revenues, and Pemex is one of the nation’s biggest employers, with about 120,000 workers. Mr. López Obrador hails from the oil-producing state of Tabasco, and the powerful Pemex labor union is a crucial part of his political base. He ran on a platform of rebuilding the company, and has raised its production budget, cut taxes it pays and reversed efforts by his predecessor to restructure its monopoly over oil production in the country.When he took office three years ago, Mr. López Obrador began undoing changes made in 2013 to the country’s Constitution intended to open the oil and gas industry to private and foreign investment. He is also pushing to reverse electricity reforms that his predecessor, Enrique Peña Nieto, put in place to increase the use of privately funded wind and solar farms and move away from state-run power plants fueled by oil and coal.Energy experts say Mexico is backtracking on a commitment it made a decade ago under President Felipe Calderón, to generate more than a third of its power from clean energy sources by 2024. Mexico now produces just over a quarter of its power from renewables.“They are going to heavier fuels rather than to lighter fuels,” said David Goldwyn, a top State Department energy official in the Obama administration. “Virtually every foreign company — Ford, Walmart, G.E., everybody who operates there — has their own net-zero target now. If they can’t get access to clean energy, Mexico becomes a liability.”Mr. López Obrador’s government has said it will combat climate change by investing in hydroelectric power and reforestation.Many of the Mexican president’s initiatives are being contested by opposition lawmakers and the business community. But Mr. López Obrador can do a lot on his own. He plans to spend $8 billion on a project to build an oil refinery in Tabasco state, and more than $3 billion more to modernize six refineries.President Andres Manuel López Obrador hails from the oil-producing state of Tabasco, and the powerful Pemex labor union is a crucial part of his political base.Gustavo Graf Maldonado/ReutersThe purchase of the Deer Park refinery is crucial to his plans because the Tabasco complex will not be completed until 2023 or 2024 and will not produce enough gasoline, diesel and other fuels to meet all of Mexico’s needs.Long a partner of Pemex, Shell, which operates the Deer Park refinery, is selling its stake in part to satisfy investors concerned about climate change who want the oil giant to invest more in renewable energy and hydrogen.Under Mexican ownership the refinery will continue its practice of using Mexican crude oil, but it will probably sell more of the gasoline and other fuels it produces to Mexico. In the future, some energy experts said, Pemex could also use the Deer Park refinery to process oil from other countries that also produce the kinds of heavy crude that Mexico does.“I think it’s a good deal and makes sense for Pemex,” said Tom Kloza, global head of energy analysis at Oil Price Information Service, who noted that Deer Park could perhaps process Venezuelan oil if the United States lifted sanctions against that country.The Mexican policy changes would have only a modest and temporary impact on American refineries, which can replace Mexican oil with crude from Colombia, Brazil, Saudi Arabia and Canada. Refiners could lose as much as a half-million barrels of transportation fuel sales a day to Mexico, but energy experts say refiners would be able to find other markets.Guy Hackwell, the general manager of the Deer Park complex, said, “Best practices will remain in place.” He said the “vast majority of the work force will report to the same job the day after the deal closes.”As for the murals, a Pemex spokeswoman, Jimena Alvarado, said, “We would never remove a historical mural.”Residents in Deer Park, in the heart of the Gulf of Mexico petrochemical complex, say they feel assured that locals will run the plant and Shell will continue to own an adjoining chemical plant. “The phone numbers will remain the same for who we contact in the event of an emergency and we will still have the same people and relationships, so I feel good about that,” Deer Park’s city manager, Jay Stokes, said.But some energy experts said Mr. López Obrador’s approach to energy, including the refinery purchase, would waste precious government resources that could be better used to reduce greenhouse gas emissions and local air pollution. There are also doubts that Mexico can build enough refining capacity to fulfill the president’s objectives.Shell, which operates the Deer Park refinery, is selling its stake in part to satisfy investors concerned about climate change who want the oil giant to invest more in renewable energy and hydrogen.Brandon Thibodeaux for The New York TimesJorge Piñon, a former president of Amoco Oil de Mexico, said Mexico most likely would not be able to immediately profit from slashing exports of crude and processing its own fuels since the refinery business typically has low profit margins, especially in Latin America.He said the Mexican refineries could not match American refineries in handling Mexico’s high-sulfur heavy crude. Mexican fuels made from heavy oil caused severe air pollution problems in many cities before the country began importing cleaner-burning American gasoline and diesel over the last 20 years.By exporting less oil, Mexico would also almost certainly use more of it for domestic power generation, potentially pushing out solar and wind generation and producing more air pollution and greenhouse gas emissions.“His nationalistic decisions will have a negative impact on climate change,” Mr. Piñon said. “He is marching back to the 1930s.”Mr. López Obrador is unapologetic. “Oil is the best business in the world,” he said at a news conference last May. More

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    Toyota Topped G.M. in U.S. Car Sales in 2021

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    After struggling to produce cars because of a global computer chip shortage, automakers are trying to move quickly to making electric vehicles.Toyota Motor unseated General Motors as the top-selling automaker in the United States last year, becoming the first manufacturer based outside the country to achieve that feat in the industry’s nearly 120-year history.That milestone underlines the changes shaking automakers, which face strong competition and external forces as they move into electric vehicles. And it came in a tumultuous and strange year in which automakers contended with an accelerating shift to electric vehicles and struggled with profound manufacturing challenges. New car sales have been damped by a severe shortage of computer chips that forced automakers to idle plants even though demand for cars has been incredibly robust.G.M., Ford Motor and Stellantis, the automaker created by the merger of Fiat Chrysler and Peugeot, produced and sold fewer cars than they had hoped to in 2021 because they were hit hard by the chip shortage. Toyota was not hurt as much.In addition to that shortage, the coronavirus pandemic and related supply-chain problems depressed sales while driving up the prices of new and used cars, sometimes to dizzying heights. Auto manufacturers sold just under 15 million new vehicles in 2021, according to estimates by Cox Automotive, which tracks the industry. That is 2.5 percent more than in 2020 but well short of the 17 million vehicles the industry usually sold in a year before the pandemic took hold.G.M. said on Tuesday that its U.S. sales slumped 13 percent in 2021, to 2.2 million trucks and cars. Toyota had access to more chips because it set aside larger stockpiles of parts after an earthquake and tsunami in Japan knocked out production of several key components in 2011. Its 2021 sales rose more than 10 percent, to 2.3 million.“The dominance of the U.S. automakers of the U.S. market is just over,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry. “Toyota might not beat G.M. again this year, but the fact that they did it is symbolic of how the industry changed. No U.S. automaker can think of themselves as entitled to market share just because they’re American.”Ford is expected to finish third when the company releases sales data on Wednesday.The shortage of chips stems from the beginning of the pandemic, when auto plants around the world closed to prevent the spread of the coronavirus. At the same time, sales of computers and other consumer electronics took off. When automakers resumed production, they found fewer chips available to them.Despite weak new-vehicle sales, automakers and dealers alike have been ringing up hefty profits because they have been able to raise prices.“Sales volumes are down but our margins are up and expenses are down,” said Rick Ricart, whose family owns Ford, Hyundai, Kia and other dealerships around Columbus, Ohio. “We barely had any inventory cost now. Cars arrive on the truck and they’re already sold. They’re gone within 24 to 48 hours.”Automakers are also contending with the transition to electric cars and trucks. Many companies are spending tens of billions of dollars designing battery-powered models and building plants to produce them. They are racing to catch up to Tesla, which sells a large majority of electric vehicles now.But most established automakers are unlikely to gain ground in U.S. electric vehicle sales this year because they are not in a position to produce many tens of thousands of such cars for at least another year or two.And Tesla, which was founded in 2003, is not standing still. After reporting a nearly 90 percent jump in global sales last year, to just shy of one million, the company plans to start mass production at two new factories this year, near Austin, Texas, and Berlin. It has been less affected by the chip shortage because it was able to switch to types of chips that are more readily available.The electric-car maker does not break out sales by country, but Cox Automotive estimated that it sold more than 330,000 in the United States, or roughly as many vehicles as Mercedes-Benz and BMW each sold here.Ford is perhaps the only major automaker that could pose a serious competitive threat to Tesla this year. This spring, Ford plans to start selling an electric version of its F-150 pickup truck, the top-selling vehicle in the United States. The company has taken more than 200,000 reservations for that truck, the F-150 Lightning, and hopes to produce more than 50,000 this year. It is increasing production at a plant near Detroit to build 80,000 in 2023 and up to 150,000 in 2024.“The F-150 is the most important franchise in our company,” Kumar Galhotra, president of Ford’s Americas and international markets group, said in an interview. “The F-150 Lightning shows how serious our commitment is to the E.V. market.”Ford has been selling a popular electric sport-utility vehicle, the Mustang Mach E, for nearly a year. It said Tuesday that it aimed to increase production of the Mach E to 200,000 vehicles a year by 2023.Other automakers are planning to produce relatively modest numbers of electric cars this year because they and their suppliers are still gearing up to build factories and produce batteries and other components. G.M. has set a goal of producing only electric vehicles by 2035, and on Wednesday it will unveil a battery-powered Chevrolet Silverado pickup truck at the Consumer Electronics Show. But the electric Silverado isn’t expected to go into production until 2023.The Coronavirus Pandemic: Key Things to KnowCard 1 of 3The global surge. More

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    Supply Chain Problems Mean Buying a Car Sometimes Takes a Plane Ride

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    The limited supply of new and used vehicles is forcing some Americans to go to great lengths to find and buy them, including traveling to dealers hundreds of miles away.When Rachael Kasper started shopping for a new car in August, she had her heart set on a Ford Escape plug-in hybrid. The problem was that Ford hasn’t made many of them this year because of a computer chip shortage that has slowed auto production around the world.Ms. Kasper first came up empty in her home state of Michigan and, later, in neighboring states. When she expanded to the East Coast, she found one — at a dealership 537 miles away, in Hanover, Pa.“I flew to Baltimore, took a Lyft to the dealer, and then drove all the way home,” said Ms. Kasper, who owns a water-sports equipment retailer. “It was quite an adventure.”The shortage of computer chips, in large part caused by decisions made in the early days of the pandemic, has rippled through the auto industry this year. Manufacturers have had to close plants for lack of parts, leaving car dealers with millions fewer vehicles to sell.As a result, car buyers have had to travel hundreds of miles to find the vehicles they want, give up on haggling and accept higher prices, and even snap up used cars that have been repaired after serious accidents.The supply squeeze coincides with an apparent increase in demand. Some people are trying to avoid mass transit or taxis. Others simply want a vehicle. Many families have saved thousands of dollars thanks in part to government benefits and stimulus payments and because they have been spending less on travel, restaurant meals and other luxuries that have fallen by the wayside because of health concerns.The end of the year is normally a peak selling season, with some automakers running ads in which cars are presented as gifts complete with giant bows. But this year consumers are finding that locating the car of their desires is not quick, easy or cheap.As Ed Matovcik, a wine industry executive in Napa, Calif., neared the end of his lease on a Tesla Model S, he decided to switch to a Porsche Taycan, a German electric car. He ordered one, but it won’t arrive until May, three months after he has to give up the Tesla.He is planning on renting cars until the Taycan arrives and is looking on the bright side. “It’s a different world now, so I don’t really mind the wait,” he said. “I’m thinking of renting a pickup for a week so I can finally clear out my garage.”The disruption to car production has rippled through the automotive world. For a time in the spring and summer of 2020, rental car companies stopped buying new cars and sold many of their vehicles to survive while travel was restricted. Now those companies are seeking to take advantage of a hot rental market and are scrambling to buy cars, often competing with consumers and dealers.The big discounts and incentives that were once standard features of car-buying in the United States have all but disappeared. Instead, some dealers now add an extra $2,000 or $3,000 on top of the list price for new cars. That has left car buyers fuming, but the dealers who are jacking up prices know that if one customer balks, another is usually waiting and willing.In November, the average price of a new car was a record $45,872, up from $39,984 a year ago, according to Edmunds, an auto-data provider. The average price paid for a used car is now more than $29,000, up from $22,679 in 2020, and Edmunds expects it to exceed $30,000 next year for the first time ever.Because of the rising prices of used cars, some consumers are spending to fix up older vehicles and keep them going for longer. More cars that have been damaged in accidents are getting fixed instead of being declared a total loss by insurers and sent to the scrap yard.“The math has changed on whether a car is totaled,” said Peter DeLongchamps, a senior vice president at Group 1 Automotive, a Houston-based auto retailer that operates its own chain of auto-body shops. “Our parts and service business is very good. We’re seeing more cars getting fixed based on the high used values.”Workers assembled a Jeep Grand Cherokee L at a Stellantis plant in Detroit in June. A computer chip shortage has slowed auto production around the world.Bill Pugliano/Getty ImagesThe auto industry’s chip shortage stems from the start of the pandemic, in the spring of 2020, when automakers closed factories for weeks and cut orders for computer chips and other parts. At the same time, homebound consumers were snapping up laptops, game consoles and other electronics, spurring makers of those devices to increase orders for semiconductors. When automakers resumed production, they found chip suppliers had less production capacity for them.As a result, automakers have produced significantly fewer trucks and cars this year than they had planned. In addition to closing plants, they’ve built vehicles without certain features, such as heated seats and electronics that maximize fuel economy. Tesla dropped power lower-back support in the passenger seat of certain models.The Coronavirus Pandemic: Key Things to KnowCard 1 of 4The Omicron variant. More

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    Why Christmas Gifts Are Arriving on Time This Year

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    Fears that a disrupted supply chain could wreak havoc on the logistics industry over the holiday turned out to be wrong as many Americans ordered early and shopped in stores.The warnings started to stream in early this fall: Shop early or you may not get your gifts on time.Global supply chain problems that have led to long delays in manufacturing and shipping could ripple outward, slowing package deliveries to millions of Americans in the weeks and days before Christmas, experts warned. The prospect even became a talking point in conservative attacks on President Biden’s policies.Despite early fears, however, holiday shoppers have received their gifts mostly on time. Many consumers helped themselves by shopping early and in person. Retailers ordered merchandise ahead of time and acted to head off other bottlenecks. And delivery companies planned well, hired enough people and built enough warehouses to avoid being crushed by a deluge of packages at the last minute, as the Postal Service was last year.The vast majority of packages delivered by UPS, FedEx and the Postal Service this holiday season are gifts destined for residential addresses, according to ShipMatrix, a software company that services the logistics industry. And nearly all have arrived on time or with minimal delays, defined as a few hours late for express packages and no more than a day late for ground shipments. The UPS and the Postal Service delivered about 99 percent of their packages on time by that measure between Nov. 14 and Dec. 11, and FedEx was close behind at 97 percent, according to ShipMatrix.“The carriers have done their part. Consumers have done their part,” said Satish Jindel, president of ShipMatrix. “When they work together, you get good results.”That’s not to say the supply chain turmoil is over. About a hundred container ships are waiting off the West Coast to unload their cargo. Big-ticket items, such as new cars, are still hard to find because of a shortage of some critical parts like computer chips. And prices are up for all kinds of goods.But at least when it comes to items that are in stock, delivery companies have given consumers little to complain about. By some measures, in fact, they have done a better job this holiday season than even before the pandemic. In the two full weeks after Thanksgiving, it took about four days from the moment a package was ordered online for it to be delivered by FedEx, according to data from NielsenIQ, which tracks online transactions from millions of online shoppers in the United States. That compares with about 4.6 days for UPS and more than five days for the Postal Service.For UPS and FedEx, those figures are an improvement of about 40 percent from a similar post-Thanksgiving period in 2019, according to NielsenIQ. For the Postal Service, it was a 26 percent improvement.“There’s all these different moving parts that have collaborated to help us get through what might have been a perfect storm to cause problems,” Bill Seward, president of worldwide sales and solutions for UPS, said in an interview. “We feel really good about where we’re at right now.”The achievement is all the more notable given that Americans are on track to spend more this holiday season than the one before — up to 11.5 percent over 2020, according to the National Retail Federation, a trade group.But this year has been different in a critical way: Many people started shopping earlier.The vast majority of packages delivered by UPS, FedEx and the Postal Service this holiday season are gifts destined for residential addresses.Desiree Rios for The New York TimesConsumer surveys, including those commissioned by UPS and NPD Group, a market research firm, found that Americans accelerated their holiday shopping this year, motivated by shortages, shipping delays or earlier sales from retailers.Jennifer Grisham, who lives in Southern California with her husband and three young children, was among them. Concerned by news of supply chain disruptions, Ms. Grisham asked her children to draw up their Christmas wish lists before Halloween, weeks earlier than usual. She had finished shopping by the day after Thanksgiving, which is usually when she starts buying gifts.“I have three kids who still believe in Santa Claus,” she said. “I was not going to bookend these two really dramatic years for us with them suddenly not getting what they wanted.”Ms. Grisham said she had little trouble finding the big-ticket items she pursued: a Barbie Dreamhouse for one daughter, Lego sets for her son and a cat condo for her other daughter, who plans to use it as a home for her stuffed animals.“I’m happy that I got it done early, because I didn’t have to worry about the risk,” she said.Retailers enticed consumers to shop early. Amazon and Target, for example, began holiday deals in October. According to Mr. Seward at UPS, 26 of the company’s 30 largest retail customers started offering substantial deals before Black Friday.Many Americans also eased pressure on UPS and other delivery companies by doing more shopping in stores. After consumers switched to online shopping in droves when the pandemic took hold last year, in-store shopping bounced back strongly this year, according to retail and logistics experts. In September, in-store sales accounted for about 64 percent of retail revenue, up 12 points from its low point during the pandemic, but still somewhat below 2019 levels, according to NPD Group.“We miss people,” Katie Thomas, a top consumer analyst at Kearney, a consulting firm, said about the compulsion to visit stores rather than buy online. “There’s a pent-up demand. We’re seeing people want to dress up again.”Retailers and delivery companies also worked behind the scenes to make sure the supply chain disruptions did not wreak havoc on holiday packages. Retailers worked harder to forecast sales and moved inventory to areas where UPS, FedEx and others had more capacity to pick up packages. Companies that previously relied mostly or exclusively on a single delivery service started doing business with several companies.The delivery companies have spent the past two years building out capacity, too, in response to surging demand. UPS, which in the past did not make deliveries on Saturday in much of the country, has been expanding its weekend service for years. It now offers Saturday deliveries to about 90 percent of the U.S. population. FedEx has added nearly 15 million square feet of sorting capacity to its network since June. And, starting in the spring, the Postal Service, which processes more mail and packages than the other delivery businesses, started leasing additional space and installing faster package-sorting machines around the country.A post office distribution center in Los Angeles last month was already in the holiday swing.Mario Tama/Getty ImagesThe companies have also responded by raising rates, imposing surcharges for larger packages that could slow down their networks, limiting the number of packages they will accept at busy times and penalizing retailers that ship many more or many fewer packages than they had forecast.“We used to think that every package was the same,” Carol Tomé, UPS’s chief executive, told financial analysts in October, explaining her strategy of focusing on quality over quantity. “We don’t think that anymore. So for some shippers, we’re no longer delivering their packages, and that’s OK with us.”The Postal Service doesn’t have the luxury of easily turning away business, but even it has done a better job of managing expectations for holiday package deliveries. Despite the introduction of its first-ever holiday surcharge last year, its delivery performance suffered. This year, however, it has fared much better, thanks to 13 million square feet of new processing space, 112 new high-speed processing machines and the decision to hire peak-season workers earlier.“U.S.P.S. is maybe the most exciting story of all,” said Josh Taylor, senior director of professional services at Shipware, a consulting firm. “The fact that they’re not overwhelmed, that their network can continue to deliver on time, it’s a great development for consumers.”But the holiday crunch does not end on Christmas. Online returns will keep delivery companies busy for weeks.And the pandemic is not yet over. Fear over the spread of the Omicron variant of the coronavirus could drive consumers back to online shopping in the months to come, which would impose new pressures on delivery companies and retailers. More